NASA is going back to the moon!
Sometime in 2025 (or perhaps 2026), NASA plans to launch its third Space Launch System (built by Boeing (BA +5.51%), Lockheed Martin (LMT 2.89%), L3Harris, Northrop Grumman, and others) on the Artemis 3 moon mission. In orbit around the moon, this SLS megarocket will meet up with a SpaceX Starship, tweaked for lunar landings, transfer its crew from one vessel to the other, and land humans on the moon for the first time in 50-plus years.
Unlike the Apollo program of the 1960s and '70s, however, when mankind reaches the moon this time, we intend to stay.
As I described last year, NASA has plans to conduct perhaps as many as 20 separate Artemis missions over the next couple of decades. Beyond the initial landing of astronauts on Artemis 3, multiple more missions will aim to deliver supplies and establish an infrastructure for permanent settlement on the moon. And these multiple missions will enlist multiple government contractors to provide the technology needed to support, supply, and provide power to such a moon base.
Last month, NASA named several more space companies that can expect to receive work from the space agency as it divvies out $150 million in government dollars to 11 separate recipients. Some of these names you'll be familiar with already -- others, probably not so much.
Round up the usual suspects
Among the familiar names are:
- Jeff Bezos' Blue Origin, which will receive $34.7 million to develop "In-Situ Resource Utilization (ISRU)-Based Power on the Moon" -- using the moon's own resources to power the moon base.
- Giant defense contractor Lockheed Martin receiving $9.1 million for "Joining Demonstrations In-Space" (i.e., space construction).
- Boeing's and Lockheed Martin's joint venture United Launch Alliance, with $25 million to fund the "ULA Vulcan Engine Reuse Scale Hypersonic Inflatable Aerodynamic Decelerator Technology Demonstration" -- an inflatable device to slow a spacecraft upon atmospheric reentry.
- Smaller Redwire (RDW +15.28%), which gets $12.9 million to develop "Infrastructure Manufacturing with Lunar Regolith."
- And tiny, still private, Astrobotic Technology, receiving an outsized $34.6 million award for "LunaGrid-Lite: Demonstration of Tethered, Scalable Lunar Power Transmission."
And round up some unusual suspects as well
Additionally, we're seeing some new names appear on NASA's contractors list -- names that long-term focused investors might want to watch as potential IPO prospects.
- Big Metal Additive of Denver is one, receiving $5.4 million for "Improving Cost and Availability of Space Habitat Structures with Additive Manufacturing."
- Freedom Photonics of Santa Barbara, California, will receive $1.6 million to demonstrate "Highly Efficient Watt-Class Direct Diode Lidar for Remote Sensing" -- a navigation technology.
- Pittsburgh's Protoinnovations gets $6.2 million to demo "The Mobility Coordinator: An Onboard COTS (Commercial-Off-the-Shelf) Software Architecture for Sustainable, Safe, Efficient, and Effective Lunar Surface Mobility Operations" (i.e., navigation software).
- Psionic of Hampton, Virginia, gets $3.2 million for "Validating No-Light Lunar Landing Technology that Reduces Risk, SWaP (Size, Weight, and Power), and Cost," in preparation for future landings on the moon's far side.
- Varda Space Industries of El Segundo, California, will receive $1.9 million for "Conformal Phenolic Impregnated Carbon Ablator Tech Transfer and Commercial Production." (I'm honestly not 100% sure what that is, but it seems to have something to do with heat transfer technology).
- And last but not least, Zeno Power Systems of Washington, D.C., will receive $15 million to demonstrate "A Universal Americium-241 Radioisotope Power Supply for Artemis" -- nuclear power in space.
So, there are several little companies receiving not a whole lot of money. (The first five, drawn from established NASA moon contractors, will receive 77.5% of the loot). So far, at least, it would appear that even NASA isn't 100% sure which of these companies are going to make it, so it's spreading its money around a lot and keeping its bets small -- much like a venture capitalist might do.
One prospect that stands out
And that's fine. Seeing as none of Big Metal Additive, Freedom Photonics, Protoinnovations, Psionic, Varda, or Zeno Power are publicly traded companies (yet), we couldn't invest in them anyway, even were they to be winning larger contracts at this stage. As for the companies we can invest in, you might be surprised to learn that Redwire seems to have the most upside from this news relative to its size.
NYSE: RDW
Key Data Points
Valued at a mere $220 million in market capitalization, the tiny space infrastructure company only did $160 million in revenue last year -- so NASA's award of a $12.9 million contract amounts to a whopping 8% boost to the company's revenue stream. And yet, Redwire's stock is essentially unchanged in price since this news was announced back on July 25.
Granted, Redwire stock is anything but a sure thing. Redwire is burning cash (negative $31 million in free cash flow), losing money ($49 million in losses over the last 12 months), and is not expected to turn profitable before 2026 at the earliest, according to analyst polls conducted by S&P Global Market Intelligence. That being said, revenue is forecast to more than double between 2022 and 2025, and NASA, at least, is upping its bets on the company.
Maybe that's a hint that there's more to Redwire stock than meets the eye.
